UPS Seeks Dismissal of Teamsters Challenge to $150,000 Driver Buyouts
UPS has filed to dismiss a Teamsters suit over its second voluntary $150,000 driver separation program, targeting 105,000 drivers with applications open Feb. 11–March 11 and separations starting end-April. The initiative follows a 34,000-worker frontline reduction and addresses an 8.6% drop in U.S. package volume plus a 50% Amazon cut.
1. Program Details
UPS has introduced the Driver’s Choice Program offering a flat $150,000 separation payout to all package car drivers regardless of seniority. The company plans to send program details to about 105,000 employees starting Feb. 11, with a one-month application window and voluntary exits beginning at the end of April.
2. Legal Challenge
The Teamsters union filed a grievance and lawsuit arguing the program violates the September 2023 national master agreement by bypassing collective bargaining on separation terms. UPS has asked a federal judge to dismiss the complaint, asserting arbitration provisions allow such incentive programs and no contract clause prohibits voluntary buyouts.
3. Operational Context
The buyout drive follows a 34,000 frontline workforce reduction and multiple cost-cutting measures after U.S. package volume fell 8.6% year over year in 2025. A 50% reduction in Amazon shipments and plans to close 24 sort facilities underpin the need to recalibrate headcount and shift delivery volumes.
4. Potential Union Impact
Critics warn that younger drivers may defect to the buyout, straining union membership goals and seniority protections. UPS believes voluntary attrition through the program could curb involuntary layoffs, but the dispute raises the prospect of arbitration and future labor unrest if a resolution is delayed.